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CAPITAL GAINS TAX RECEIPTS SOAR

The amount of money HMRC collected from capital gains tax (CGT) receipts hit a record high in the tax year 2019/20, bringing in £9.94 billion, figures from HMRC show.

Receipts were £243 million higher than 2018/19 when £9.7bn was collected, and higher too than in 2017/18, when £9bn was collected.

As Tax Director, Chris Regnauld explained: "For clarification, Capital Gains Tax is a tax on the profit when you sell something (an ‘asset’) that’s increased in value. It’s the gain you make that’s taxed, not the amount of money you receive. For example, if you bought a painting for £5,000 and sold it later for £25,000. This means you made a gain of £20,000 (£25,000 minus £5,000) so that's what you would be taxed on."

The amount of taxpayers paying CGT dropped for the second year in a row, however, from 288,000 in 2017/18 to 265,000 in 2019/20, meaning people are paying more in CGT on average than in previous years.

Figures also show that most CGT payments came from a small number of taxpayers. In the 2019/20 tax year, 41% of tax came from those who made gains of £5m or more, a group representing less than 1% of taxpayers.

Early estimates place the amount collected in the 2020/21 tax year at £10.61bn, although this figure is yet to be confirmed by HMRC.

The tax take for CGT is forecast to rise even further over the next five years to reach £14.4bn in 2025/26, according to Government estimates.

Talk with us to talk about your CGT planning on Nantwich Accountants office T: 01270 623731 - Wilmslow Accountants office T: 01625 416380 or contact Chris.Regnauld@affordbond.com